Services Sector in India

The Government of India recognises the importance of promoting growth in the services sector and provides several incentives across a wide variety of sectors like health care, tourism, education, engineering, communications, transportation, information technology, banking, finance, and management among others.

• India's digital healthcare transformation is advancing through initiatives like the Ayushman Bharat Digital Mission (ABDM). Under the Ayushman Bharat–PMJAY, more than 15,733 private hospitals have been empanelled as of 31 December 2025, including 1,259 hospitals in aspirational districts, expanding healthcare access in underserved regions. Additionally, under the Ayushman Bharat Digital Mission (ABDM), around 8.79 crore ABHA cards were created during 2025–2026 (as of 28 January 2026), highlighting the rapid adoption of digital health infrastructure in India.
• The revised GST framework directly impacts the services sector, particularly through rate rationalisation and reclassification of services. Under the latest reforms, many services such as transport, courier, e-commerce delivery, and professional services have been moved to the 18% GST slab (from 12%), increasing the tax burden and potentially affecting pricing and demand. At the same time, selected services like tailoring, beauty, cleaning, and certain job work activities have been reduced to 5%, improving affordability in these segments. Additionally, health and life insurance services have been made GST-exempt, reducing costs for consumers.
• The Union Budget 2025 has significantly increased allocation for the BharatNet project by 238% year-on-year to Rs. 22,000 crore (US$ 2.6 billion) in FY2025–26, aimed at expanding broadband connectivity in rural government-run secondary schools and primary healthcare centres (PHCs). The initiative targets a large opportunity base of around 1 million government-run schools, building on earlier phases where Rs. 420 billion was allocated to connect 214,323 Gram Panchayats.
• India’s draft National Telecom Policy 2025 (NTP-25) aspires to achieve 100% 4G coverage and 90% 5G population coverage by 2030 underscoring a bold vision to elevate digital inclusion and infrastructure.
• The National Education Policy (NEP) 2020 is in the implementation phase, with gradual rollout across school and higher education. The 5+3+3+4 structure is being adopted, alongside a focus on foundational literacy by 2026–2027, skill-based learning, and digital integration. In higher education, four-year undergraduate programmes with multiple entry-exit options and multidisciplinary learning are being introduced, with a target to achieve a 50% Gross Enrolment Ratio (GER) by 2035. While progress is visible in enrolment, digital adoption, and curriculum reforms, implementation remains uneven across states and institutions.
• As of June 2025, an impressive 42,093 out of 45,934 villages in India’s Northeastern Region now have mobile connectivity, including 40,663 with 4G access, supported by 2,485 towers commissioned through the Digital Bharat Nidhi to extend services in remote and border areas.
• Under the Pradhan Mantri Jan Dhan Yojana (PMJDY), a total of 57.78 crore accounts have been opened with deposits of Rs. 2,94,702 crore (US$ 33.34 billion) as of February 2026. Of these, 32.21 crore accounts (55.8%) belong to women, and 45.17 crore accounts (78.2%) are in rural and semi-urban areas.
• According to RBI’s Scheduled Banks’ Statement, deposits of all scheduled banks collectively surged by a whopping Rs. 2,39,99,113 crore (US$ 2,800.69 billion) as of August 2025.
• As of June 2025, India has 23 Indian Institutes of Technology (IITs), 21 Indian Institutes of Management (IIMs), and 20 All India Institutes of Medical Sciences (AIIMS), reflecting significant growth in premier higher education and research institutions.
• The India–EU Free Trade Agreement (FTA), concluded in January 2026, marks a significant milestone in strengthening economic ties and deepening market integration between the two economies. As a modern, rules-based framework, the agreement provides preferential access across 97% of EU tariff lines, covering 99.5% of trade value, while maintaining flexibility for sensitive sectors. In services, the EU has extended commitments across 144 subsectors, including IT/ITeS, professional, education, and business services, providing Indian service providers with a stable and predictable environment to expand exports. These provisions are expected to support innovation, enhance productivity, and strengthen business growth across both economies
• The Ministry of Health and Family Welfare (MoHFW) is leveraging artificial intelligence (AI) to enhance public health services across India focusing on developing and adopting AI-driven healthcare solutions.
• Centre has formulated an ‘Action Plan for Champion Sectors in Services’ to give focused attention to 12 identified Champion Services Sectors.